BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Jasbir Singh Chawla, House No. 123/1, Sector 55, Chandigarh 160055

…..Complainant(s)….

                                V E R S U S

1]     HDFC Ltd. SCO No. 153-155, Sector 8-C, Chandigarh through its Branch Manager.

2]     HDFC Standard Life Insurance Co. Ltd. SCO No. 139-140, Sector 9-C, Madhya Marg, Chandigarh 160017 through its Branch Manager.

                                        ……Opposite Parties……..

CORAM:   SH.P.D.GOEL, PRESIDENT

                        SH.RAJINDER SINGH GILL, MEMBER

                DR.(MRS) MADANJIT KAUR SAHOTA, MEMBER

Argued by: Sh. Gaurav Bhardwaj, counsel for complainant.

                Ms. Promila Nain, counsel for OP No.1

                Sh. Sandeep Suri, counsel for  OP No.2

PER DR.(MRS) MADANJIT KAUR SAHOTA, MEMBER 

        Concisely put, the complainant along with his wife was sanctioned a loan of Rs.15,80,670/- by HDFC Ltd. repayable in 120 monthly installment of Rs.20024 each  (Annexure C-1). The said loan was granted for ground floor flat allotted under handicapped quota to the wife of the complainant. A insurance policy was given to the complainant towards cover of the loan vide policy No. 10922804  on 26.2.2007 (Annexure C-2) by the HDFC Standard Insurance Co. Ltd. (OP No.2), which is a sister concern of HDFC Ltd  and as such the loan enhanced to Rs.16,65,671/- so, EMI thereof was enhanced to Rs.21,101/-.  On 18.12.2007 the wife of the complainant died due to cardiac arrest.   Thereafter, the death claim under the policy No. 10922804 was filed with the OP No.2, which was repudiated vide letter dated 3.4.2008 (Annexure C-3) on the ground that vital information of her suffering from multiple sclerosis was not provided.  Even the complainant paid all 50 intallments after death of his wife, which was not required as per terms and conditions. The complainant made representations to the Grievance Committee who vide Annexure C-4 advised to approach Insurance ombudsman. But the insurance ombudsman dismissed the complaint on 1.9.2008 (Annexure C-5). The complainant averred HDFC Ltd. was well aware of the health condition of his wife as the proposal form and other requisite documents were got signed by OP No.1 from the deceased..  Hence, the repudiation of claim is illegal, unjust and not proper.  Hence this complaint alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice

2.     In written reply the OP No.1 admitted sanction of loan to the complainant, also that the complainant and his late wife themselves opted House Protection Plan of HDFC Standard Life Insurance and thereafter requested for enhancement of  loan amount for premium payment. The OP 1 had no concern with the said plan. However, on the request of the complainant and his wife loan was enhanced and supplementary loan agreement was executed.  Further the OP No.1 took the plea that  OP No.1 and OP No.2 are two different  companies, having distinct legal entities  in the eyes of law.  Moreover, the insurance premium paid by the complainant to OP No.2 was got financed from OP No.1 and is part of loan amount and equated monthly installment of the same to be repaid by him.   All other material allegations  of the complainant have been denied and prayed for dismissal of the complaint. 

3.             The OP No.2 admitting the factual matrix of the complaint to the extent that Policy no. 10922804 was issued by it on the basis of information furnished by the Deceased Life Assured and the HDFC Ltd. and rest of the formalities for obtaining the loan as well as the said insurance policy was completed by the HDFC Ltd. in alliance with life assured. Therefore, no case is made out qua OP No.2. The OP No.2 further pleaded that  under Section 45 of the Insurance Act 1938, OP No 2 is entitled to repudiate  a policy within two years on the ground of false statement or medical report.   Moreover, the deceased answered in negative regarding her health;  as to whether they have received any treatment or hospital treatment or suffered from any symptoms or medical conditions, as laid down in proposal form in sub Section (1) & (3) of Section 3 , which deals with Declaration of Life Assured.  The OP 2 further pleaded that after death of the deceased, a investigation was carried out and it was found that wife of the complainant was suffering from multiple sclerosis with qusdriparesis in 2004. Hence, the claim of the complainant was repudiated due to non-disclosure of such vital information. Denying all the other material allegations prayed, that the complainant qua OP No. 2 be dismissed.    

4.     The Parties led evidence in support their contentions.

5.     We have heard the Learned Counsel parties and have also perused the record. 

6.     The main grouse of the complainant in this complaint is that the insurance claim of the complainant was repudiated by the OP No.2, subsequent to the death of his wife (life assured) on the ground that the life assured had not provided vital information of her suffering from multiple sclerosis and as such they were not liable to pay the claim as per letter dated 3.4.2008 (Annexure C-3).  Thereafter the complainant made a representation on 2.5.2008 to the grievance committee as well as approached the Insurance Ombudsman on 27.5.2008 (Annexure C-4) but all in vain, as the Ombudsman also dismissed the claim on 1.9.2008 (Annexure C-5) .  The Ombudsman took the view and clarified that the physical and health condition of the deceased life assured was known to the HDFC Ltd., and not to the Standard Life Insurance because the documents were filled and got signed by the officials of the HDFC Ltd. and the OP No.2 had given insurance cover on the basis of the self declaration in the proposal form singed by the insured. The complainant averred that HDFC Standard Life Insurance is sister concern of OP No.1, hence there is no concealment about the health of the life assured. Thus repudiation of claim was not just and proper.

7.     On the other hand the OP.1 submitted that complainant and his late wife themselves opted House Protection Plan of HDFC Standard Life Insurance and accordingly got enhanced their loan amount for premium payment and the OP 1 has nothing to do with the said plan..  Further the OP No.1 denied that HDFC Ltd. and OP No.2 are same concern.  The OP No.1 only financed insurance premium which is part of loan amount. The claim of the complainant was repudiated by OP No.2 on the ground of false declaration regarding health condition of the deceased, thus it is the responsibility of the complainant to pay the loan being legal heir of the deceased. Whereas OP No.2 took the stand that it has issued the policy on the basis of information provided by the complainant and the HDFC Ltd., which has also been clarified by the insurance ombudsman vide its order dated 1.9.2008, meaning thereby the OP No.2 was not known to the health condition of the complainant. It has further been contended that under the provisions of Section 45 of the Insurance Act 1938, the
OP-insurer is entitled to repudiate a policy within two years on the ground that a statement made in the proposal or in any report of a medical officer or referee or friend of the insured or any other document leading to issue of the policy was inaccurate or false.  Moreover, on investigation after death of the deceased, it was found that wife of the complainant was suffering from multiple sclerosis with qusdriparesis in 2004. Hence, OP  No.2 repudiated the claim of the complainant for non-disclosure of such vital information.

8.             In view of the foregoing discussion as well as facts and evidence placed on file by OPs, in which they have categorically stated that concealment of material facts by the complainant at the time of obtaining the policy, leads to repudiation of the claim as per terms and conditions of the policy. Such concealment of facts, is evident from the proposal form now marked as Annexure R-1/2, wherein the relevant questions under Section 3 (1) & (3) which deals with “Declaration of the Life to be Assured, were answered in negative by the insured. On the other hand, in the Investigation Report furnished by Paramount Consultancy Services, at page no. 54 under the heading of observations it has been clearly mentioned that Mrs. Ravinder Kaur Chawla aged 47 years was a house wife and in 2004 she was treated for multiple Sclerosis by Dr. J.S. Chopra.  Furthermore under the heading of observations at point No.15 page 55 it has been mentioned that;  As per “Post Graduate Institute of Medical Education & Research, Chandigarh”  dated 23.2.2001, No. Dis/Bd/2001/1652 certifying that Smt. Ravinder Kaur, aged 39 years, C.R. No. A540149, is a case of “multiple Sclerosis with quadriparesis”, and she is physically handicapped and has 100% impairment in relation to her body.

        Thus it is apparent from the above that the wife of the complainant was suffering from multiple sclerosis with quadriparesis prior to taking the policy in question. Moreso, the above said observation never ever has been denied by the complainant. Hence there is a clear case of concealment of facts, which has led to the repudiation of the claim of the claimant by OP No.2.  

9.     While perusing thoroughly, the evidential proof placed on file, we have come to the conclusion that nowhere OP-Insurance company is deficient in providing service to the complainant. Therefore, we found that there is no merit in the complaint and accordingly the same is dismissed without any orders as to costs.

10     Certified copies of this order be sent to the parties free of charge.  The file be consigned.

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